Asia Fuel Oil-Premiums range-bound; little change in fundamentals

The cash premiums on 180-cst and 380-cst fuel grades firmed marginally on Wednesday, pulled up by a slightly stronger market structure, though there were little changes in supply and demand fundamentals.

The 180-cst and 380-cst cash premiums stood at $1.88 a tonne and 42 cents a tonne, both to Singapore spot quotes, respectively, up 13 cents a tonne and 4 cents a tonne from Tuesday, Reuters data showed.

Despite arbitrage volumes arriving in Asia next month falling to a two-month low, the fuel
oil market was not much rattled by thinner supplies, as demand had not picked up to cause any tightness.

“June trading of cargoes is very quiet, to be honest,” said a North Asia-based trader.

Shipowners could have been put off by the high flat prices of marine fuel in recent weeks due to a rally in the crude market, traders said.

Bunker fuel oil prices have averaged $611.79 a tonne over June 11-18, more than 2 percent higher than the week before, Reuters data showed. BK380-B-SIN

Brent crude has strengthened by leaps in the last week due to rising violence in northern
Iraq.

Late Wednesday, the Brent market was rising towards $114 a barrel as Sunni militants pushed forward in the region, striking a key refinery near Baghdad and stoking worries about oil exports from the key producer.

“Crude prices are trending higher and higher. Buyers must get used to this,” said a Singapore-based trader.

In other news, India’s Essar Oil is offering 75,000 tonnes of vacuum gasoil for loading over July 10-14 loading from Vadinar in a tender that will close on June 19.
Source: Reuters (Reporting by Jane Xie; Editing by Sunil Nair)